Legislative

2011-2012 WRA Legislative Priorities

 The 2011-12 legislative session will be a difficult one as the state struggles with a challenging economy and a significant budget deficit. Wisconsin’s real estate markets face a similarly challenging year, with hopes of starting to reverse declining home sales and stabilize home prices.

Understanding the connection between the state’s economy, budget and real estate market is the first step toward finding solutions to these problems. In Wisconsin, the real estate industry constitutes approximately 14 percent of the gross state product. Every $100 spent on real estate generates an additional $44 in spending on related products and services in other sectors of the economy. For local government, property taxes alone generated $10.1 billion (gross) in 2009-10 ($9.1 billion net after tax credits). Property-related taxes and fees provide well over 90 percent of all local government revenues. For our quality of life, homeownership produces tangible social benefits, including improved educational achievement, civic participation, better schools, lower crime and improved property values.

These numbers lead to one conclusion: Wisconsin’s economy and quality of life cannot recover until Wisconsin’s real estate markets recover.

The WRA stands ready to partner with Gov. Walker, his new administration and the new legislature to focus on job creation, economic revitalization and a real estate renaissance in Wisconsin. The WRA legislative agenda below is designed to identify issues, both large and small, that will help Wisconsin homeowners, property owners, businesses and real estate professionals – and thus the entire state - grow and prosper in 2011 and 2012.

The ideas are grouped, but not prioritized, in the following four categories: Economic and Job Development, Real Estate Transactions, Regulatory Reform, and Tax Reform. 

The legislative agenda is also available in a downloadable PDF at: 2011-2012_Legislative_Agenda

ECONOMIC AND JOB DEVELOPMENT

Goal: Encourage greater economic development and job growth in Wisconsin by providing additional incentives to attract new businesses, retain existing employers and stabilize local economies.

1. Distressed TIF Districts – Modify Wisconsin’s TIF law to provide communities with greater flexibility to stabilize failing TIF districts through (a) greater utilization of donor TIDs, (b) expansion of 3-year extension provision to all TIDs (those created before 10/1/04), and (c) allowing TIDs created before 10/1/08 to be eligible for “distressed TID” status. 
2. WHEDA bonding authority – Allow existing WHEDA bonding authority to be used for economic development (similar to Ohio’s Third Frontier program). 
3. Relocations, start-ups and expansions – Encourage more business relocations, start-up businesses and expansion of existing businesses in Wisconsin by:
1. Reducing state capital gains taxes on all investments made by businesses relocating to Wisconsin, in state start-ups and expansions; and/or 
2. Reducing corporate income taxes for a period of time for all businesses relocating to Wisconsin, start-ups and expansions.  
4. Reinvesting in Wisconsin businesses – Establish a tax exemption for capital gains realized from investments made in Wisconsin that are reinvested in Wisconsin for at least two years. 
5. Restructuring of the Department of Commerce – Restructure the Wisconsin Department of Commerce to make it more proactive in attracting new businesses to Wisconsin and making existing Wisconsin businesses more profitable.  

REAL ESTATE TRANSACTIONS

Goal: Improve the real estate market in Wisconsin by reducing real estate transaction costs, protecting consumer choice in real estate services, and clarifying regulatory uncertainties relating to for real estate professionals.  

1. Electronic record retention – Clarify the record retention law (RL 15.04) to ensure that real estate licensees may retain records in an electronic format.  
2. Broker price opinions – Defend against any additional restrictions at the state level relating to broker price opinions.  
3. Mandatory attorney review of offers to purchase – Preserve the consumer’s option to seek legal counsel prior to entering into an offer by defending against attempts to require attorney review of all offers to purchase.  
4. Mortgage loan originators – Work with DFI to develop a more reasonable interpretation of the federal Dodd-Frank law relating to mortgage loan originators, including exempting sellers who have been given power of attorney for an estate.  
5. Escrow accounts for mortgagees – Authorize mortgagees to opt out of escrow account requirements (taxes, insurance, etc.) after a certain period of time by writing a letter to the lender. 
6. Streamline foreclosure process – Consider possible ways to expedite current foreclosure process, such as creating a separate non-judicial foreclosure system for foreclosures that meet certain requirements.
7. Private transfer fees – Prohibit the use of deed restrictions for the purpose of imposing private transfer fees, but create exceptions for (a) existing properties with private transfer fees, and (b) payments to organizations, such as homeowners associations, where there is a direct benefit to the homeowner. 
8. Vacant land real estate condition report – Require the use of a real estate condition report for all transactions involving vacant land. 
9. Time of sale requirements – Prohibit state and local time of sale requirements that would limit or impede a property owner’s right to transfer property.

REGULATORY REFORM

State Level

1. Farmland conversion fee – Promote economic development that is consistent with local zoning and planning by repealing the conversion fee placed on the rezoning of farmland currently zoned for exclusive agriculture. Also, eliminate the Purchase of Agricultural Conservation easements (PACE) program, which is funded with conversion fees. 
2. Permitting deadlines and presumptive approval – Create reasonable certainty and predictability to Wisconsin’s permitting process by (a) requiring agencies to establish reasonable deadlines for approving permits, (b) deeming applications to be automatically approved (under certain conditions) if the application is not acted upon within the specified time frame, and (c) refunding the permit application fee if agency does not act upon permit within specified time frame for any permit activity not subject to presumptive approval. 
3. Shoreland zoning after annexation/incorporation – Encourage higher density development and streamline regulatory process by eliminating the requirement for cities and villages to adopt state shoreland zoning standards (NR 115) for property newly annexed or incorporated into city/village limits. 
4. Guarantee the right to place a pier – Remove regulatory uncertainty by protecting the right of waterfront property owners to place a pier. Current law allows DNR to prohibit the placement of a pier if the pier would be located in area designated by the DNR as an “area of special natural resource interest.” 
5. Ordinary high water mark – Create greater certainty as to where the boundary line between public rights and private rights is located by
   a. Defining “ordinary high water mark” using objective criteria (e.g., elevation lines), and/or
   b. Authorizing counties to determine OHWM if the county and DNR disagree on the location (2007 AB 543) 
6. Extend pier registration deadline – Extend the deadline for registering all piers that are not exempt from Ch. 30 pier standards (currently April 1, 2011) for another 12-24 months. 
7. Wetland mitigation – Enhance utilization of wetland mitigation program by, among other things, limiting “practicable alternatives” analysis to substantially similar activities on the same site (i.e., this would exclude “not doing the project”, “doing a similar project on a different site,” etc.). 
8. DNR Secretary – Oppose authorizing the NR Board (rather than the governor) to appoint the DNR Secretary. 
9. Separation of powers – Clarify that an agency's broad statement of authority does not override the specific regulatory framework set forth in state statute. This clarification will prevent the DNR and other state agencies from usurping the authority given to them by the legislature in regulating matters such as municipal wells, sprinklers, shoreland zoning, and piers. 
10. Choice of venue – Authorize legal challenges to administrative rules to be brought in the circuit court for the county where the plaintiff resides. Requiring all challenges to administrative rules to take place in Dane County centralizes power in one county and is unfair to the property owners and businesses located in the other 71 counties. 
11. Governor accountability – Require the governor to approve all administrative rules before they are sent to the legislature for review. This proposal makes Wisconsin's top elected official directly accountable to the public for the laws and regulations adopted by the administrative branch of government. 
12. Wind siting –  Modify wind siting law to ensure that wind siting regulations have adequate setbacks and other necessary protections to protect the health, safety and property values of nearby property owners.
13. Smart growth – Oppose efforts to repeal or changes that would negatively impact Wisconsin’s comprehensive planning law.  

Local Level  

1.  Nonconforming structures – Protect the right of property owners to maintain, repair and make reasonable improvements to nonconforming structures located in shoreland areas by codifying nonconforming structure standards currently in state shoreland zoning standards (Wis. Admin. Cod Ch NR 115). Also, protect the ability of property owners to engage in unlimited maintenance and repair of nonconforming structures in non-shoreland areas. 
2. Substandard lots – Create greater certainty for property owners and promote more efficient economic development patterns by protecting the right of property owners to build upon “substandard lots” (lots that met any lot size requirements in place at the time the lots were created, but do not meet current lot size requirements) that have not been previously merged. (See Wis. Admin. Code § NR115.05(1)(a)(3)). 
3. Development moratoria – Restrict the ability to stop economic development by developing a framework for enacting development moratoria (purpose, duration, process, etc.). Also, prohibit counties from enacting moratoria. 
4. Vested rights – Provide greater certainty and fairness in the permit approval process by freezing development regulations for completed permit applications and provide that any subsequent changes in land use regulations will not affect the consideration of the pending application. (Would codify existing case law standards).
5. Variances – Clarify that variances from local zoning regulations do not expire unless specifically stated in the ordinance at the time of granting. 
6. Individual notice – Provide individual property owners and the general public with more effective notice of proposed land use regulations and changes that would impact the use and value of their property by eliminating current procedural and payment requirements necessary for receiving notice.  

TAX REFORM

Goal: Improve Wisconsin’s real estate market by reducing the tax burden related to the ownership and transfer of real estate, and health care costs for independent contractors.  

1. Capital gains – Reduce capital gains tax by restoring prior law, which exempted 60% of the capital gain from taxation.
2. Real estate transfer tax – Eliminate/reduce the real estate transfer tax which will reduce transaction costs for sellers. 
3. Property taxes – Provide meaningful property tax relief to homeowners and other property owners by placing a hard cap on property tax increases, tax rates, or tax assessments. 
4. Health Savings Accounts – Create state income tax deduction for contributions to health savings accounts